---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington D.C.
20549

FORM 10-QSB

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
  SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended June 30, 2006

[]
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
  ACT OF 1934
  For the transition period from ______ to ______

Commission file number: 000-28837

NEW JERSEY MINING
COMPANY(Exact name of registrant as specified in its
charter)

|Idaho                        | 82-0490295                       
|---------------------------- | ---------------------------------
|(State or other jurisdiction | (IRS employer identification no.)
|of incorporation)            |                                  

89 Appleberg Road, Kellogg, Idaho
83837(Address of principal executive offices)

Registrants telephone number, including area code: (208)
783-3331

|Common Stock        | The OTC-Bulletin Board               
|------------------- | -------------------------------------
|Title of each class | Name and exchange on which registered

Indicate by check mark whether the registrant (1) has filed all
  reports required to be filed by Section 13 or 15(D) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period as the
  registrant was required to file such reports), and (2) has been subject to filing
  requirements for the past 90 days.
  Yes [ X ] No []

Indicate by check mark whether the registrant is a shell company
  (as defined in Rule 12b-2 of the Exchange Act) 
  Yes []
  No [ X ]

On July 31, 2006, 27,256,155 shares of the registrants common
stock were outstanding.

Transitional Small Business Disclosure Format (Check one): 
  Yes []
  No [ X ]

---



|NEW JERSEY MINING COMPANY      
|-------------------------------
|QUARTERLY REPORT ON FORM 10-QSB
|FOR THE QUARTERLY PERIOD       
|ENDED JUNE 30, 2006            
|                               
|                               
|TABLE OF CONTENTS              

|                                                                                                     | Page
|---------------------------------------------------------------------------------------------------- | ----
|                                                                                                     |     
|PART I  FINANCIAL INFORMATION                                                                       | 3   
|                                                                                                     |     
|Item 1: Financial Statements                                                                         | 3   
|                                                                                                     |     
|Item 2: Managements Discussion and
      Analysis of Financial Condition and  Results of Operations | 7   
|                                                                                                     |     
|Item 3: Controls and Procedures                                                                      | 10  
|                                                                                                     |     
|PART II  OTHER INFORMATION                                                                          |     
|                                                                                                     |     
|Item 1: Legal Proceedings                                                                            | 10  
|                                                                                                     |     
|Item 2: Unregistered Sales of Equity Securities
      and Use of Proceeds                            | 10  
|                                                                                                     |     
|Item 3: Defaults Upon Senior Securities                                                              | 10  
|                                                                                                     |     
|Item 4: Submission of Matters to a Vote
      of Security Holders                                    | 10  
|                                                                                                     |     
|Item 5: Other Information                                                                            | 10  
|                                                                                                     |     
|Item 6: Exhibits and Reports on Form 8-K                                                             | 10  
|                                                                                                     |     
|SIGNATURES                                                                                           | 12  

[The balance of this page has been intentionally left
blank.]

2

---

|PART I-FINANCIAL INFORMATION  
|------------------------------
|                              
|Item 1: FINANCIAL STATEMENTS  
|                              
|NEW JERSEY MINING COMPANY     
|(An Exploration Stage Company)
|BALANCE SHEET                 
|June 30, 2006                 
|(Unaudited)                   

|ASSETS                                                 |   |            |  
|------------------------------------------------------ | - | ---------- | -
|Current assets:                                        |   |            |  
|Cash and
      cash equivalents                        | $ | 888,465    |  
|Accounts Receivable                                    |   | 61,118     |  
|Inventories                                            |   | 40,760     |  
|Total current assets                                   |   | 990,343    |  
|                                                       |   |            |  
|Building and equipment, net of depreciation            |   | 759,265    |  
|Mineral properties, net of amortization                |   | 819,939    |  
|                                                       |   |            |  
|Total assets                                           | $ | 2,569,547  |  
|                                                       |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                   |   |            |  
|                                                       |   |            |  
|Current liabilities:                                   |   |            |  
|Accounts payable                                       | $ | 95,457     |  
|Accrued
      payroll related expenses                 |   | 3,522      |  
|Obligation under capital
      lease  current portion |   | 20,465     |  
|Equipment
      note payable  current portion         |   | 6,686      |  
|Total current liabilities                              |   | 126,130    |  
|                                                       |   |            |  
|Accrued reclamation costs                              |   | 12,500     |  
|Obligation under capital lease, non-current            |   | 42,924     |  
|Equipment note payable, non-current                    |   | 26,685     |  
|                                                       |   |            |  
|Total liabilities                                      |   | 208,239    |  
|                                                       |   |            |  
|Stockholders equity:                                  |   |            |  
|Preferred
      stock, no par value; 1,000,000         |   |            |  
|shares authorized; no shares issued or outstanding     |   |            |  
|Common
      stock, no par value; 50,000,000 shares    |   |            |  
|authorized; 27,245,255 shares issued and outstanding   |   | 4,858,692  |  
|Deficit
      accumulated during the development stage |   | (2,497,384 | )
|Total stockholders equity                             |   | 2,361,308  |  
|                                                       |   |            |  
|Total liabilities and stockholders equity             | $ | 2,569,547  |  

The accompanying notes are an integral part of the financial
statements.

3

---

|NEW JERSEY MINING COMPANY                                                                               
|--------------------------------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                                          
|STATEMENTS OF OPERATIONS                                                                                
|For the Three and Six-Month Periods ended June 30,
      2006 and 2005 and for the period from inception
|(July 18, 1996) through June 30, 2006                                                                   
|(Unaudited)                                                                                             

|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   | From Inception  |  
|----------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ---------- | - | - | --------------- | -
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   | (July 18, 1996) |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   | Through         |  
|                                          |   | June 30, 2006 |   |   | June 30, 2005 |   |   | June 30, 2006 |  
|                                          |   | Three Months  |   |   | Six Months    |   |   | Three Months  |   |   | Six Months |   |   |                 |  
|Revenue:                                  |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Sales of gold                             |   | 0             |   | $ | 40,429        |   | $ | 9,150         |   | $ | 9,150      |   | $ | 49,709          |  
|Sales of concentrate                      | $ | 60,563        |   |   | 138,035       |   |   | 21,283        |   |   | 46,097     |   |   | 390,048         |  
|Total
      revenue                       |   | 60,563        |   |   | 178,464       |   |   | 30,433        |   |   | 55,247     |   |   | 439,757         |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Cost and expenses                         |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Production costs                          |   | 131,031       |   |   | 246,886       |   | $ | 80,155        |   | $ | 118,497    |   |   | 489,368         |  
|Management fees                           |   | 58,446        |   |   | 110,687       |   |   | 42,400        |   |   | 65,713     |   |   | 474,742         |  
|Exploration expense                       |   | 124,434       |   |   | 127,392       |   | $ | 8,732         |   | $ | 35,992     |   |   | 898,024         |  
|Gain on Sale of mineral
      property    |   | (90,000       | ) |   | (90,000       | ) |   |               |   |   |            |   |   | (90,000         | )
|Depreciation and amortization             |   | 23,303        |   |   | 44,803        |   |   | 11,995        |   |   | 13,892     |   |   | 102,593         |  
|General and
      administrative expenses |   | 115,443       |   |   | 168,581       |   |   | 60,693        |   |   | 156,131    |   |   | 1,011,229       |  
|Total
      operating expenses            |   | 362,657       |   |   | 698,349       |   |   | 203,975       |   |   | 390,225    |   |   | 2,885,956       |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Other (income) expense:                   |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Timber Sales                              |   |               |   |   |               |   |   |               |   |   |            |   |   | (51,695         | )
|Net royalties and other
      income      |   | 4,989         |   |   | 8,887         |   |   | (11,770       | ) |   | (12,202    | ) |   | (43,539         | )
|Interest expense (net)                    |   | 1,626         |   |   | 5,052         |   |   | 1,648         |   |   | 3,374      |   |   | 25,469          |  
|Write-off of goodwill                     |   |               |   |   |               |   |   |               |   |   |            |   |   | 30,950          |  
|Write-off of investment                   |   |               |   |   |               |   |   |               |   |   |            |   |   | 90,000          |  
|Total other (income) expense              |   | 6,615         |   |   | (76,061       | ) |   | (10,122       | ) |   | (8,828     | ) |   | 51,185          |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Net loss                                  | $ | 308,709       |   | $ | 443,824       |   | $ | 163,420       |   | $ | 326,150    |   | $ | 2,497,384       |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Net loss per common share-basic           | $ | 0.011         |   | $ | 0.018         |   | $ | 0.007         |   | $ | 0.015      |   | $ | 0.164           |  
|                                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Weighted average common shares            |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|outstanding-basic                         |   | 27,233,896    |   |   | 25,233,985    |   |   | 21,959,769    |   |   | 21,841,967 |   |   | 15,182,884      |  

4

The accompanying notes are an integral part of these
financial statements.

---

|NEW JERSEY MINING COMPANY                                                                                     
|--------------------------------------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                                                
|STATEMENTS OF CASH FLOWS                                                                                      
|For the Six-Month Periods ended June 30, 2006 and 2005
      and for the period from inception (July 18, 1996)
|through June 30, 2006                                                                                         
|(Unaudited)                                                                                                   

|                                                      |   |           |   |   |          |   |   | From Inception      |  
|----------------------------------------------------- | - | --------- | - | - | -------- | - | - | ------------------- | -
|                                                      |   |           |   |   |          |   |   | (July 18, 1996)     |  
|                                                      |   | June 30,  |   |   | June 30, |   |   | Through             |  
|                                                      |   | 2006      |   |   | 2005     |   |   | June
      30, 2006 |  
|                                                      |   |           |   |   |          |   |   |                     |  
|Cash flows from operating activities:                 |   |           |   |   |          |   |   |                     |  
|Net loss                                              | $ | (443,824  | ) | $ | (326,150 | ) | $ | (2,497,384          | )
|Adjustments to reconcile net loss to
      net cash   |   |           |   |   |          |   |   |                     |  
|used
      by operating activities:                   |   |           |   |   |          |   |   |                     |  
|Depreciation and amortization                         |   | 44,803    |   |   | 13,892   |   |   | 102,593             |  
|Write-off of equipment                                |   |           |   |   | 11,272   |   |   | 11,272              |  
|Write-off of goodwill and investment                  |   |           |   |   |          |   |   | 120,950             |  
|Gain on sale of mineral property                      |   | (90,000   | ) |   |          |   |   | (90,000             | )
|Stock
      issued for:                               |   |           |   |   |          |   |   |                     |  
|Management and directors fees                         |   | 42,688    |   |   | 65,713   |   |   | 440,161             |  
|Services and other                                    |   | 51,336    |   |   | 20,278   |   |   | 123,604             |  
|Exploration                                           |   |           |   |   | 12,500   |   |   | 36,321              |  
|Change in:                                            |   |           |   |   |          |   |   |                     |  
|Inventory                                             |   | 28,050    |   |   |          |   |   | (40,760             | )
|Accounts receivable                                   |   | (61,117   | ) |   | (33,924  | ) |   | (61,118             | )
|Other assets                                          |   |           |   |   | 2,346    |   |   | 1,722               |  
|Accounts payable                                      |   | (1,814    | ) |   | 24,469   |   |   | 92,487              |  
|Accrued payroll and related
      payroll expenses    |   | (5,479    | ) |   | 3,471    |   |   | 3,522               |  
|Accrued reclamation costs                             |   |           |   |   |          |   |   | 12,500              |  
|Net
      cash used by operating activities           |   | (435,357  | ) |   | (206,133 | ) |   | (1,744,130          | )
|                                                      |   |           |   |   |          |   |   |                     |  
|Cash flows from investing activities:                 |   |           |   |   |          |   |   |                     |  
|Purchases of building and equipment                   |   | (123,047  | ) |   | (27,283  | ) |   | (522,515            | )
|Proceeds from sale of
      mineral property          |   | 120,000   |   |   |          |   |   | 114,096             |  
|Cash of acquired companies                            |   |           |   |   |          |   |   | 38,269              |  
|Deferral of development
      costs                   |   |           |   |   |          |   |   | (225,535            | )
|Net cash used by investing
      activities           |   | (3,047    | ) |   | (27,283  | ) |   | (595,685            | )
|                                                      |   |           |   |   |          |   |   |                     |  
|Cash flows from financing activities:                 |   |           |   |   |          |   |   |                     |  
|Exercise of stock
      purchase warrants             |   |           |   |   |          |   |   | 677,600             |  
|Sales of common stock, net of issuance
      costs    |   | 1,320,000 |   |   | 105,000  |   |   | 2,643,807           |  
|Principal payments on
      capital lease             |   | (9,994    | ) |   | (6,186   | ) |   | (73,127             | )
|Payments on note payable to bank                      |   |           |   |   |          |   |   | (20,000             | )
|Net cash
      provided by financing activities       |   | 1,310,006 |   |   | 98,814   |   |   | 3,228,280           |  
|                                                      |   |           |   |   |          |   |   |                     |  
|Net change in cash                                    |   | 871,602   |   |   | (134,602 | ) |   | 888,465             |  
|Cash, beginning of period                             |   | 16,863    |   |   | 151,764  |   |   | 0                   |  
|Cash, end of period                                   | $ | 888,465   |   | $ | 17,162   |   | $ | 888,465             |  
|Interest paid in cash                                 | $ | 5,521     |   | $ | 3,374    |   | $ | 16,079              |  
|                                                      |   |           |   |   |          |   |   |                     |  
|Non-cash investing and financing activities:          |   |           |   |   |          |   |   |                     |  
|Common stock issued
      for:                        |   |           |   |   |          |   |   |                     |  
|Equipment                                             | $ | 2,000     |   | $ | 5,850    |   | $ | 23,176              |  
|Mineral properties                                    |   |           |   | $ | 65,000   |   | $ | 199,300             |  
|Acquisitions of companies, excluding cash             |   |           |   |   |          |   | $ | 743,653             |  
|Capital lease
      obligation for equipment acquired |   |           |   |   |          |   | $ | 63,332              |  
|Note payable for equipment acquired                   | $ | 33,927    |   |   |          |   | $ | 33,927              |  

5

The accompanying notes are an integral part of these
financial statements.

---

New Jersey Mining Company Notes to Financial Statements
(Unaudited)

1. Basis of Presentation:

The unaudited financial statements have been prepared by the
Company in accordance with accounting principles generally accepted in the
United States of America for interim financial information, as well as the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the Companys management,
all adjustments (consisting of only normal recurring accruals) considered
necessary for a fair presentation of the interim financial statements have been
included. Operating results for the three and six month periods ended June 30,
2006, are not necessarily indicative of the results that may be expected for the
full year ending December 31, 2006.

For further information refer to the financial statements and
footnotes thereto in the Companys Annual Report on Form 10-KSB for the year
ended December 31, 2005.

The Company presents its financial statements in accordance
with SFAS No. 7, Accounting for Development Stage Entities, as management
believes that while the Companys planned principal operations have commenced,
the revenue generated from them is not sufficient to cover all corporate costs.
Additional exploration and development of the Companys properties is required
to report as an entity not in the development stage.

2. Description of Business

New Jersey Mining Company (the Company) was incorporated as
an Idaho corporation on July 18, 1996. The Company's primary business is
exploring for and developing gold, silver, and base metal mining resources in
Idaho.

3. Net Loss Per Share

Statement of Financial Accounting Standards No. 128, Earnings
per Share, requires dual presentation of basic earnings per share (EPS) and
diluted EPS on the face of income statements for all entities with complex
capital structures. Basic EPS is computed as net income divided by the weighted
average number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur from common shares issuable through
stock options, warrants, and other convertible securities. For the three months
ended June 30, 2006 and 2005, the effect of the Companys outstanding warrants
would have been anti-dilutive. Accordingly, only basic EPS is presented. As of
June 30, 2006 the Company had 5,530,750 outstanding warrants that could
potentially dilute basic EPS in the future.

4. Revenue Recognition

Revenue is recognized when title and risk of ownership of
metals or metal bearing concentrate have passed and collection is reasonably
assured. Revenue from the sale of metals may be subject to adjustment upon final
settlement of estimated metal prices, weights and assays, and are recorded as
adjustments to revenue in the period of final settlement of prices, weights and
assays; such adjustments are typically not material in relation to the initial
invoice amounts.

6

---

5. Inventory

Gold and concentrate inventories are stated at the lower of
cost or net realizable value determined by using a weighted average method.

6. Reclassifications

Certain prior period amounts have been reclassified to conform
to the 2006 financial statement presentation. These reclassifications have no
effect on net loss as previously reported.

7. Adoption of new accounting principle

On January 1, 2006, the Company adopted Statement of Financial
Accounting Standards No. 123 (revised 2004), Share-Based Payment, (SFAS
123(R)) which requires the measurement of the cost of employee services
received in exchange for an award of an equity instrument based on the
grant-date fair value of the award. SFAS 123(R) supersedes previous accounting
guidance under the intrinsic value method prescribed by Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25).

The Company adopted SFAS 123(R) using the modified prospective
transition method, which requires the application of the accounting standard as
of January 1, 2006. There was no impact on the financial statements as of and
for the three and six months ended June 30, 2006 as a result of the adoption of
SFAS 123(R). In accordance with the modified prospective transition method, the
financial statements for prior periods have not been restated to reflect, and do
not include, the impact of SFAS 123(R).

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Plan of Operation

This report contains both historical and prospective statements
concerning the Company and its operations. Prospective statements (known as
"forward-looking statements") may or may not prove true with the passage of time
because of future risks and uncertainties. The Company cannot predict what
factors might cause actual results to differ materially from those indicated by
prospective statements.

The Company is executing its strategy to conduct mining and
mineral processing operations on higher grade ore reserves it has located on its
exploration properties. The financial strategy is to generate cash from these
operations to pay for corporate expenses and to provide additional funds for
exploration, thus reducing the need to raise funds through financing activities
including sale of common stock. The Company plans to continue exploration for
gold, silver and base metal deposits in the greater Coeur dAlene Mining
District of northern Idaho. The Company has three mines at which most
exploration is being conducted; the Golden Chest, the Silver Strand, and the New
Jersey. Production of gold ore is in progress at the Golden Chest mine.
Permitting has been completed and production of silver-gold ore is planned at
the Silver Strand mine in 2007. Production from lower grade reserves at the New
Jersey open pit mine is being conducted to provide mill feed when higher grade
ore from the Golden Chest is not available.

The Companys highest ranked exploration project is the Idaho
vein at the Golden Chest mine. During the second quarter seven additional
exploration drillholes were completed, mostly to the south of the previous
drillholes. This recent drilling shows that the Idaho vein is limited to the
south so future drilling will be done to the north and down dip to the west.
Drilling of the Idaho vein and other targets at the Golden Chest is scheduled to
resume in the fourth quarter of 2006.

Mining operations on the Katie Dora vein at the Golden Chest
  mine continued in the second quarter of 2006. The access ramp was extended 90
  meters to intersect the vein at the 955 m elevation. The vein is well mineralized
  where it was intersected. A drift will be driven to the extent of the ore shoot
  on 955 m elevation and a raise will be

7

---

driven on the vein toward the 965 m elevation drift. Ore
production was suspended during June in order that work could be concentrated on
finishing the access ramp. Currently, ore production has resumed.

Management ranks its Silver Strand mine as the next most
promising exploration site ranking behind the Idaho vein. Operating permits have
been received for mining and exploration at the Silver Strand mine which is
located on unpatented claims on public land. Work commenced near the end of the
second quarter of 2006 to complete the necessary infrastructure required by the
Operating Plan before ore production can be undertaken. Exploration drilling is
planned to test geophysical anomalies which were found in 2004. Funds are
available to complete the planned work at the Silver Strand mine in 2006.

Management also thinks exploration in the New Jersey mine area
has promising potential. Previous drilling has indicated higher grade
mineralization in the North Coleman vein area and at the Scotch Thistle
prospect, and interesting silver-base metal mineralization has been drilled at
the Enterprise prospect. It is planned to drive a crosscut at the lowest adit
level to test the North Coleman area, and further drilling may be conducted at
the Scotch Thistle and Enterprise prospects. A drilling access road was
completed in the second quarter at the Enterprise prospect. Funds are available
to complete these exploration plans, but exploration work at the Golden Chest
and Silver Strand mines will take higher priority.

The 2006 Plan includes adding a concentrate leach circuit at
the New Jersey mineral processing plant. Concentrate would be leached and a
gold-silver dore produced for sale. The reason for adding the concentrate leach
circuit will be to obtain more revenue compared to selling concentrates by
increasing recovery and eliminating concentrate freight as well as to avoid any
potential difficulties in marketing concentrates. Currently, the plant is about
35% complete with commissioning scheduled for the first quarter of 2007.

Financial Condition  The Company has maintained a minimal
  cash balance by increasing or decreasing its exploration expenditures as limited
  by availability of cash from operations or from financing activities. As a result
  of financing activities in March and April of 2006, the cash balance increased
  to $888,465, and Figure 1 shows the corresponding balances for previous accounting
  periods. During the second quarter the Companys interest in the CAMP area
  was sold for $120,000 cash.



Results of Operations  Operations only commenced during the
second quarter of 2005 so comparisons to previous periods are not relevant.
Production costs exceeded revenue for the second quarter of 2006 by $70,468

8

---

due to suspension of production at the Golden Chest to drive
  the ramp extension. Figure 2 shows the net loss for the second quarter of 2006
  of $308,709, which increased from previous quarters due to increased exploration
  expenses, and the net losses in previous accounting periods.



Gold production in pyrite concentrates was 128 ounces in the
second quarter. Gold production was less than expected because of suspension of
stoping at the Golden Chest while driving ramp and processing lower grade
Coleman ore in place of the higher grade Golden Chest ore. Gold production is
expected to range from 300 to 400 ounces per quarter during the next two
quarters. Revenues from concentrate sales were $60,563 in the second
quarter.

Mining operations at the Golden Chest mine are projected to
continue for approximately 12 months based on existing ore reserves. Efforts are
being made to expand the amount of ore reserves in parallel veins and separate
ore shoots, but no assurance can be made at this time whether additional
reserves will be found. Mining and mineral processing operations have continued
through the second quarter in a normal manner.

Mining operations are planned to start at the Silver Strand
mine once final details of the Plan of Operations and bond amounts are received
from the United States Forest Service. This work may be delayed until the 2007
season. Initial work will involve driving a new adit, building the water
collection and land application system and other infrastructure work. Production
of ore is not expected to start until the 2007 season. The Company has
sufficient funds to commence operations at the Silver Strand mine.

Present silver and gold prices are sufficient in managements
estimation to generate a gross profit at the Silver Strand mine based on the
operating plan which was part of the permitting process.

The amount of money to be spent on exploration at the Companys
mines and prospects will depend upon the amount of gross profit generated by
operations and the amount of money raised by financing activities. Management
expects to be able to continue the present operating scenario at the Golden
Chest mine, to be able to commence production at the Silver Strand mine, to
continue to operate the mineral processing plant, and to conduct planned
exploration drilling activities for the foreseeable future, considering
available funds and projected cash flows from operations.

9

---

Item 3. Controls and Procedures

An evaluation was performed by the Companys president and
principal financial officer of the effectiveness of the design and operation of
the Companys disclosure controls and procedures. Upon that evaluation, the
Companys president and principal financial officer concluded that disclosure
controls and procedures were effective as of June 30, 2006, in ensuring that all
material information required to be filed in this quarterly report has been made
known to them in a timely fashion.

The Company has added an internal accountant to the staff
during the quarter ended June 30, 2006. This has allowed additional segregation
of duties which has improved the Companys internal controls over financial
reporting.

|PART II - OTHER INFORMATION
|---------------------------

Item 1. LEGAL PROCEEDINGS

None

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

Neither the constituent instruments defining the rights of the
registrants securities filers nor the rights evidenced by the registrants
outstanding common stock have been modified, limited or qualified.

The Company issued 22,400 shares of restricted common stock to
President Fred W. Brackebusch for management services rendered in the second
quarter of 2006. The shares were valued at a price of $0.725 per share. In
managements opinion, the securities were issued pursuant to exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.

During the second quarter of 2006, the Company issued 141,950
shares at an average price of $0.32 to various accredited and sophisticated
individuals for goods and services. In managements opinion, the securities were
issued pursuant to exemptions from registration under Section 4(2) of the
Securities Act of 1933, as amended.

Item 3. DEFAULTS UPON SENIOR SECURITIES

The Company has no outstanding senior securities.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

None

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

|Exhibit |                                                                                                                                    
|------- | -----------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                        
|        |                                                                                                                                    
|31.1    | Certification pursuant
      to Section 906 of the Sarbanes-Oxley act of 2002.                                                     
|        |                                                                                                                                    
|32.1    | Certification pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002.

10

---

Reports on Form 8-K.

ITEM 2.01 COMPLETION OF ACQUISITION FOR DISPOSITION OF ASSET,
May 23, 2006.

[The balance of this page has been intentionally left
blank.]

|11
|--

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

| | NEW JERSEY MINING COMPANY
| | -------------------------
| |                          
| | By:                      
| |                          
| |                          
| |                          
| |                          
| |                          
| |                          
| | By:                      
| |                          
| |                          
| |                          
| |                          

12

---